Re: "why not just tax people"
... or why not just tax company profits at source? That way Governments can get the money that they want without getting involved with complicated paperwork with a lot of bemused citizens.
If a government doesn't tax company profits at source the money will vanish and you will find , if you look really really hard, that a lot of it is no longer within the jurisdiction of the government, who will then get the money they want from the bemused citizens.
The "tax the people" system works really well for some and not at all well for a lot of bemused citizens.